Making Cost Estimates Part of the Patient Financial ConversationBy Jim Denny

Imagine bringing your car in for repair and asking for an estimate, only to be told the mechanic couldn’t provide one. You probably wouldn’t leave your car with this body shop; instead, you’d take it down the road to the mechanic that could give you an upfront price. While most consumers wouldn’t get their cars fixed without fully knowing the cost, healthcare organizations still expect patients to agree to treatment without a full understanding of the cost involved. In some cases, this leads people who have serious health issues to delay treatment for fear of how much they will have to spend. The lack of transparency, coupled with the perceived payment inflexibility, causes patients to feel like they can’t control their healthcare expenses.

The reality is many healthcare organizations are not providing cost information to patients, even if they have it readily available. In a recent national survey, 75 percent of provider respondents stated they can share cost estimates; however, less than 25 percent of patient respondents say they requested one at their last visit, and only 16 percent received one without asking for it. These figures indicate that patients may not always be aware that cost estimates are available to them, and that providers may not always offer this information proactively. This represents a missed opportunity to strengthen communication, limit confusion, and set clear payment expectations.

Why the Disconnect?

One of the reasons that organizations may not offer estimates (even if they are capable of generating them) is a concern about reliability. Healthcare organizations often believe that providing potentially incorrect information could be worse than not providing any information at all. However, survey results indicate that patients have a different view, with most expressing that they would appreciate the information even if it is not 100-percent accurate. In fact, nearly two-thirds of respondents would find any estimate, or one that falls within 10 percent or more of their actual costs, to be extremely helpful. This reinforces the point that a less-than-exact figure is still considered valuable. Organizations should not allow this fear of inaccuracy to hold them back, and should look at operationalizing estimates, providing one before a patient asks for it.

Making Estimates Part of the Routine

To enable these discussions, organizations must make sure that the process of generating and sharing an estimate is embedded into operational workflow. If this effort is too cumbersome or takes staff off task, then they are more likely to skip over it — and given the lack of patient awareness that estimates are available, the patient may not know to ask for the approximation if it’s not offered, leading to even less estimates provided to patients.

To seamlessly weave cost estimation into financial discussions, organizations should consider using technology that streamlines the process, making it as easy for staff as pushing a button during registration or during other front-office activities. Not only should the estimate reflect the total cost of care, but it should also involve a real-time eligibility check that determines unmet deductibles, co-pay, and co-insurance amounts, so the organization can provide the patient with as close an approximation as possible of what the patient will owe. The cost estimation technology should be part of a comprehensive revenue cycle solution that allows staff to see the complete picture of the patient’s account, helping them to knowledgeably answer questions if they arise, while further streamlining the billing process for both front- and back-office staff.

Organizations should also train their staff on what the cost estimate conversation should entail and how it fits into the larger financial discussion. Staff should learn about how to encourage patients to carefully review the estimate and ask follow-up questions. Note that these conversations can be difficult and complex, so proper education may involve scripts and role-playing exercises to ensure that each staff member is comfortable with his or her role in communicating information, and is aware of the impact he or she can have on patient satisfaction.

A Key Step in Improving Transparency

Being proactive about cost estimates is not only the right thing to do from a patient experience perspective, but it also may increase the likelihood of payment because the patient has received upfront information that allows him or her to plan for the expense. The more organizations can incorporate cost estimates into early financial conversations, the more clarity they will provide to patients, ultimately enhancing the transparency of the encounter, and increasing the patient’s trust and satisfaction with the organization.